International politics is becoming more and more contested. The leading world powers like the United States (US) and China are competing with one another in new geopolitical areas, surpassing each other’s ability to work there. The recent development in Middle Eastern affairs has unfolded a new direction for China as the mediator in the world’s conflict-ridden areas. The Kingdom of Saudi Arabia’s delegation, led by His Excellency Dr Musaad bin Mohammed Al-Aiban, Minister of State, and the Islamic Republic of Iran’s delegation, led by His Excellency Admiral Ali Shamkhani, Secretary of the Supreme National Security Council of the Islamic Republic of Iran, negotiated an agreement in Beijing from 6 March to 10 March 2023.
According to the announcement from Beijing, an agreement has been reached between both adversaries from the Middle East, which includes an agreement to resume diplomatic relations between them and re-open their embassies and missions within a period not exceeding two months. The agreement also includes their affirmation of respect for the sovereignty of states and their non-interference in the internal affairs of states. They also agreed that the foreign ministers of both nations should get together to put this into action, arrange for the return of their ambassadors, and talk about ways to improve bilateral relations. In addition to it, the Security Cooperation Agreement signed in 2001, and the General Agreement for Cooperation in the Areas of Economics, Commerce, Investment, Technology, Science, Culture, Sports, and Youth signed on 2/2/1419 (H), corresponding to 27 May 1998, were also agreed to be put into effect. This pledge to normalise diplomatic relations has serious implications for the optics of China’s new role in world affairs.
Beijing aspires for the Iranian-Saudi agreement to be seen by the world as an illustration of China’s increasing influence and leadership potential, which will compound the importance and relevance of GSI in the future.
There is a certain background for this new development of China’s role in mediating and reconciliation. The Global Security Initiative (GSI), unveiled by President Xi in April 2022, has induced diplomatic activism in world affairs. With the recent rapprochement, it can be inferred that China is pursuing its commitment to the GSI; as mentioned above, the 10 March deal reflects two of the six pillars of the GSI where peaceful resolution and commitment to respecting sovereignty have been articulated. Therefore, it can be said that the Saudi-Iranian deal is the result of the Chinese vision of global security in terms of GSI.
On the other side, the link between the Chinese vision of global security and its economic needs cannot be decoupled. China imports more than 40% of its crude oil from the Gulf, which needs stability amid the turmoil in the global energy markets caused by Russia’s invasion of Ukraine. The two major powers in the region, Iran and Saudi Arabia, have backed opposite sides in the conflicts in Yemen, Lebanon, Iraq, and Syria. Therefore, lowering their hostility toward one another could help ease tensions in the entire region. It would help fulfil Xi’s promise to buy more oil and gas from the Gulf during a highly reported trip to Saudi Arabia in December 2022.
As this rapprochement has been brokered by China, therefore, some analysts have hypothesised that it may pave the way for wider adoption of the petroyuan, where oil transactions would be settled in yuan rather than the US dollar, which has long been the norm in energy transactions. In light of US sanctions against Russia, China recently reached an agreement with Iraq, and other nations have thought about taking similar steps.
The American inability to facilitate any Saudi-Iran rapprochement due to the US-Iran rift favoured China in the current Iranian-Saudi jigsaw. Therefore, one can assume from the current development that US and Chinese contestation is somewhere satiating the desire of middle and lower powers to have alternate options as per their own divergence or convergence of interests to engage with the bigger power. Therefore, building an alternative to the US-led global order, which China sees as a more multilateral approach to global security, is the driving force behind these ideas. The BRICS (Brazil, Russia, India, China, and South Africa) have also received interest from Saudi Arabia and Iran, and the Chinese are allegedly supportive. Together, these nations might form a potent economic and political bloc, especially with the inclusion of Saudi Arabia and Iran. In addition to it, Saudi Arabia’s cabinet approved inclusion in the Shanghai Cooperation Organization (SCO) just a few days after this deal has positive future implications. On the other side, the Iranian parliament has also ratified Iran’s membership. China has sought to position itself as the head of an emerging, alternative international order and a responsible great power, as the US has mobilised Western allies to defend Ukraine. Beijing aspires for the Iranian-Saudi agreement to be seen by the world as an illustration of China’s increasing influence and leadership potential, which will compound the importance and relevance of GSI in the future.
The brokered deal between Saudi Arabia and Iran is a new direction in which China is heading after its GSI. The security imperatives are intertwined with the economic interests of China overseas. One cannot dilute the fact that America was not in a position to facilitate this deal because of US-Iran relations. However, China’s appearance in world affairs as a mediator is going to strengthen China’s assertive role in global politics.
